…as USTDA signs gas power project agreement
By Etuka Sunday
The Nigerian power sector will remain undeveloped if consumers are unwilling to pay for the power that they consume. This is according to Yusuf Usman, Chief Operating Officer (Gas and Power), Nigerian National Petroleum Corporation (NNPC). He made the statement during a panel discussion on “The Way Forward for Gas and Energy” at the ongoing Nigerian International Petroleum Summit (NIPS) in Abuja. He therefore called on consumers to be willing to pay for the power they consume in order to encourage investors in the sector.
“The problem of gas in Nigeria is not pricing but collection” Usman stated.
He told the gathering that the inability of the power distribution companies to collect payments for power supplied jeopardizes the bankability of power projects.
“We can only deliver power to off-takers if there is a power purchase agreement (PPA). Consumers need to pay for power consumed.”
Mr. Osagie Okunbor, Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum and Development Company (SPDC), stated that bankability is a way of reducing the risk involved in developing projects. He noted that the availability of resources is just one step in the creation of wealth.
Earlier in the day, the United States Trade Development Agency (USTDA) signed a gas power development grant agreement with the NNPC to finance the development of 1.35 megawatts power plant in Abuja. Ambassador Mary Beth Leonard, United States Ambassador to Nigeria told the audience that the project is one of several projects the agency is undertaking in Nigeria.
Also speaking on the occasion, Tom Hardy, Director of the USTDA said that the signing of the agreement is his agency’s effort to close the power deficiency gap in Nigeria, secure energy capacity and to drive economic growth.
In his own remarks, Mele Kolo Kyari, Group Managing Director of NNPC acknowledged that Nigeria is power deficient which leads to poverty among the populace. He stated that it is the intention of government to deliver power citing the various power projects earmarked for Abuja, Kaduna and Kano.
“This country is open for business. And it is for the peace and prosperity of the country” Kyari said.
General Electric will build the proposed power plant in Abuja.